Invalid Board Does Not Have Authority to Bring Lawsuit on Association’s Behalf

The Appeals Court of Illinois recently held that an association’s board of directors does not have authority to bring a lawsuit on behalf of the association if it is not formed properly according to the condominium’s governing documents and the law. While this case is not binding in Washington, it may indicate how Washington courts would decide a similar issue.

In Forrestville, the Forrestville Condominium Association filed a complaint against a unit owner, McKinley, to secure a judgment and gain possession of the unit as a result of delinquent assessments. The association argued that it had authority under the condominium’s governing documents to manage the property and bring this lawsuit. McKinley challenged the authority of the association’s board of directors for the following reasons: there were only two members, but it is required to have three; both members were owners of the same single unit, and the Illinois Condominium Act forbids multiple board members from a single unit; and neither board member was validly elected. McKinley argued that, since the board was not valid, the notice of delinquent assessments and demand for possession she received from the association were invalid, so the lawsuit should be dismissed.

The association argued that its lawsuit should not be dismissed based on McKinley’s defenses and that any issues with the board were not related to the underlying complaint for delinquent assessments and possession of the unit. The appellate court disagreed.

The appellate court found that McKinley’s motion to dismiss, and unchallenged statements regarding the invalidity of the board, should have been considered by the trial court. The court held that only a board that is formed according to the governing documents and the law can have legal standing and authority to bring a lawsuit on behalf of an association.

4934 Forrestville Condomimium Ass’n v. McKinley, 2016 IL App (1st) 152519-U.

Court Defers to Association’s Interpretation of its Bylaws

The Washington Court of Appeals recently held that an association’s board of directors was validly constituted and properly passed bylaw amendments, so the board (and the management company as the board’s agent) had the authority to charge and collect fines and fees. Parker Estates Homeowners Ass’n v. Pattison, No. 47402-6-II, 2016 WL 7468226, at *1…

“Rent-Free” Living During Redemption Period

The Washington State Court of Appeals recently held that the owner of a condominium unit could not be forced to move out or pay rent during the redemption period after a judicial foreclosure by the Association. Viewcrest Condo. Ass’n v. Robertson, No. 74115-2-I, 2016 WL 7470025 (Wash. Ct. App. Dec. 27, 2016) In the case,…

Associations Not Required to Disclose Privileged Information

The Maryland Court of Special Appeals held that the Maryland Condominium Act did not require disclosure of information related to legal advice or attorney work product (privileged information) to owners. Although this case was decided in Maryland, and it is not binding in Washington, it could indicate how Washington courts would decide a similar issue…

Easement Holder’s Consent Required to End Easement

In Majestic Oaks Home Owners Association, Inc. v. Majestic Oaks Farms, Inc., the Kentucky Court of Appeals held that an amendment to a subdivision declaration could not cancel an easement without the easement holder’s consent. Although this case was decided in Kentucky, and it is not binding in Washington, it could be an indication of…

Is Short-Term Leasing a “Commercial Use”?

In Houston v. Wilson Mesa Ranch Homeowners Association, Inc., the Colorado Court of Appeals held that short-term rentals did not violate a covenant prohibiting commercial use of a unit. However, this ruling did not indicate that all restrictions on short-term rentals are unenforceable. Although this case was decided in Colorado, and it is not binding…

Business Judgment Rules does not Apply to Unauthorized Acts

The South Carolina Supreme Court held that association board decisions must be evaluated individually to see if the business judgment rule applied, and the business judgment rule did not apply when the board acted beyond its authority. Although this case was decided in South Carolina, it could be an indication of how a Washington court…

Update on Annual Seafair Party!

Our annual SEAFAIR & Blue Angel LUNCHEON is upon us!  Please join us at our annual Seafair & Blue Angel luncheon for Community Association Managers taking place on Friday, August 5, 2016 from noon – 4pm at Gil Price’s Leschi home located at 3513 S. Leschi Place, Seattle, WA 98144.  Mark your calendars as we…

Condo Law Annual Seafair Luncheon is August 5

SEAFAIR and our annual SEAFAIR LUNCHEON are upon us! Please join us at our annual Seafair Blue Angel luncheon for Community Association Managers taking place on Friday, August 5, 2016 from noon – 4pm at Gil Price’s Leschi home located at 3513 S. Leschi Place, Seattle, WA 98144.  Mark your calendars as we look forward…

Update on Changes at CLG

As you should now be aware, three of our attorney colleagues (Rachel Burkemper, Stephen Smith, and Theresa Torgesen) left our firm on July 5, 2016 to form their own firm.  They have been contacting Condominium Law Group’s clients this week causing confusion and frustration with our, and your, clients.  We sincerely apologize for this. It has…

Invalid Board Does Not Have Authority to Bring Lawsuit on Association’s Behalf

The Appeals Court of Illinois recently held that an association’s board of directors does not have authority to bring a lawsuit on behalf of the association if it is not formed properly according to the condominium’s governing documents and the law. While this case is not binding in Washington, it may indicate how Washington courts would decide a similar issue.

In Forrestville, the Forrestville Condominium Association filed a complaint against a unit owner, McKinley, to secure a judgment and gain possession of the unit as a result of delinquent assessments. The association argued that it had authority under the condominium’s governing documents to manage the property and bring this lawsuit. McKinley challenged the authority of the association’s board of directors for the following reasons: there were only two members, but it is required to have three; both members were owners of the same single unit, and the Illinois Condominium Act forbids multiple board members from a single unit; and neither board member was validly elected. McKinley argued that, since the board was not valid, the notice of delinquent assessments and demand for possession she received from the association were invalid, so the lawsuit should be dismissed.

The association argued that its lawsuit should not be dismissed based on McKinley’s defenses and that any issues with the board were not related to the underlying complaint for delinquent assessments and possession of the unit. The appellate court disagreed.

The appellate court found that McKinley’s motion to dismiss, and unchallenged statements regarding the invalidity of the board, should have been considered by the trial court. The court held that only a board that is formed according to the governing documents and the law can have legal standing and authority to bring a lawsuit on behalf of an association.

4934 Forrestville Condomimium Ass’n v. McKinley, 2016 IL App (1st) 152519-U.

Court Defers to Association’s Interpretation of its Bylaws

The Washington Court of Appeals recently held that an association’s board of directors was validly constituted and properly passed bylaw amendments, so the board (and the management company as the board’s agent) had the authority to charge and collect fines and fees. Parker Estates Homeowners Ass’n v. Pattison, No. 47402-6-II, 2016 WL 7468226, at *1…

“Rent-Free” Living During Redemption Period

The Washington State Court of Appeals recently held that the owner of a condominium unit could not be forced to move out or pay rent during the redemption period after a judicial foreclosure by the Association. Viewcrest Condo. Ass’n v. Robertson, No. 74115-2-I, 2016 WL 7470025 (Wash. Ct. App. Dec. 27, 2016) In the case,…

Associations Not Required to Disclose Privileged Information

The Maryland Court of Special Appeals held that the Maryland Condominium Act did not require disclosure of information related to legal advice or attorney work product (privileged information) to owners. Although this case was decided in Maryland, and it is not binding in Washington, it could indicate how Washington courts would decide a similar issue…

Easement Holder’s Consent Required to End Easement

In Majestic Oaks Home Owners Association, Inc. v. Majestic Oaks Farms, Inc., the Kentucky Court of Appeals held that an amendment to a subdivision declaration could not cancel an easement without the easement holder’s consent. Although this case was decided in Kentucky, and it is not binding in Washington, it could be an indication of…

Is Short-Term Leasing a “Commercial Use”?

In Houston v. Wilson Mesa Ranch Homeowners Association, Inc., the Colorado Court of Appeals held that short-term rentals did not violate a covenant prohibiting commercial use of a unit. However, this ruling did not indicate that all restrictions on short-term rentals are unenforceable. Although this case was decided in Colorado, and it is not binding…

Business Judgment Rules does not Apply to Unauthorized Acts

The South Carolina Supreme Court held that association board decisions must be evaluated individually to see if the business judgment rule applied, and the business judgment rule did not apply when the board acted beyond its authority. Although this case was decided in South Carolina, it could be an indication of how a Washington court…

Update on Annual Seafair Party!

Our annual SEAFAIR & Blue Angel LUNCHEON is upon us!  Please join us at our annual Seafair & Blue Angel luncheon for Community Association Managers taking place on Friday, August 5, 2016 from noon – 4pm at Gil Price’s Leschi home located at 3513 S. Leschi Place, Seattle, WA 98144.  Mark your calendars as we…

Condo Law Annual Seafair Luncheon is August 5

SEAFAIR and our annual SEAFAIR LUNCHEON are upon us! Please join us at our annual Seafair Blue Angel luncheon for Community Association Managers taking place on Friday, August 5, 2016 from noon – 4pm at Gil Price’s Leschi home located at 3513 S. Leschi Place, Seattle, WA 98144.  Mark your calendars as we look forward…

Update on Changes at CLG

As you should now be aware, three of our attorney colleagues (Rachel Burkemper, Stephen Smith, and Theresa Torgesen) left our firm on July 5, 2016 to form their own firm.  They have been contacting Condominium Law Group’s clients this week causing confusion and frustration with our, and your, clients.  We sincerely apologize for this. It has…